3 consequences of a loan rejection

Have you made one or several applications for private credit that have unfortunately not been accepted, and are you now wondering whether these rejections have any repercussions?

ZEK (Swiss credit information system) records

If your application was made to a bank, the rejection will be recorded on the ZEK database for 6 months. Each rejection is recorded. It can be classified under different codes, for example 99 with reasons (budget, too committing, etc.) that may or may not be given.

If you used a broker and they did not submit your application to a bank because you do not fulfil the basic conditions, you will not be recorded on the ZEK system.

Will a rejection penalise you?

A loan rejection becomes detrimental when you have to wait for a minimum of 6 months before re-submitting a loan application. This depends on the number of rejections and the reasons behind them.

The number of occurrences is important

A rejection and the ZEK record that results from this will not penalise you in itself, so long as you have not accumulated more than 2 of these.

But as soon as you reach 3 refusals or more, this poses a problem for future loan requests.

Many people make the mistake of applying to several banks at the same time, and if all banks refuse because the basic conditions stipulated in the LCC law (Swiss consumer credit law) are not fulfilled, the number of recorded rejections will rapidly rise over the threshold of 2, with repercussions that will penalise you in future requests.
A broker works with several banks, and will only submit your application to the bank where your profile is most likely to be accepted for a loan. And if your application is refused, one single notification will be recorded on the ZEK system.

Legal proceedings as a reason for rejection

If you have not been able to obtain your loan due to one or several legal proceedings, you will have to wait longer before re-submitting an application.

However, your record on the ZEK system will last for 6 months in all cases, whatever the reasons for the rejection.

When should you submit a new loan application?

Before making another application, you should first analyse and identify the reasons for the rejection, whether once or several times. So long as the reasons for the rejection have not been made clear, there is no point in making a new application, no matter how much time has elapsed.

As soon as the problem has been detected and resolved, from that point onwards a new request can be made after 3 months.

If the reasons for the rejection are related to legal proceedings, you will have to wait at least 6 months.

Author

After having worked as a customer advisor at the Banque Cantonale de Genève from 08.1998 to 12.2003, I created CC Crédits Conseils SA, my own financial brokerage firm in 2004.

Information

This blog is run by a non-jurist author. The information provided is based on the professional and personal experience of the latter. We therefore highly recommend that you consult with a lawyer and do not base any decisions solely on the content of this blog, insofar as it is provided for informational purposes only. The author may not therefore be held liable by the blog's readers or by any person who may use this information without performing adequate verifications with a specialised lawyer or jurist.